The Alberta Court of Appeal recently revisited the question of directors’ personal liability for injuries sustained in a workplace incident.

In this case, the defendant was a director of a company which was retained as a subcontractor to perform work in a new home construction. The work included the installation of a temporary staircase. The director was involved in both the supervision and the actual installation of the staircase. The staircase collapsed, injuring the plaintiffs who were workers for another subcontractor also performing work at the house.

The plaintiffs were considered “workers” under the Workers’ Compensation Act (Alberta) (“WCA”) and both their employer and the director’s company were considered “employers” under the WCA. Therefore, both corporations were immune from suit pursuant to the WCA. The Workers’ Compensation Board (“WCB”) compensated the workers for their injuries and brought a subrogated action against the director in the name of the injured workers, seeking to recover the amounts the WCB had paid to the plaintiffs under the WCA.

The director successfully applied to a Master for summary dismissal of the claim. A Justice in Chambers dismissed the appeal. The plaintiffs appealed the dismissal of the action to the Court of Appeal.

The key question for the Court of Appeal was whether a corporate representative could be personally liable for damage resulting from his or her own tortious conduct while acting as a representative for the corporation. The Court noted that under the WCA, directors are not covered or immune from suit unless they have purchased personal coverage, regardless of whether the director is actually performing manual labour or not. The director in this case had not purchased personal coverage.

The Court then reviewed the importance of recognizing the separate corporate personality and limited liability, calling it an “essential tool of social and economic policy.” However, the Court acknowledged that corporations could be misused as a tool and thus it was important to hold directors personally liable when appropriate to do so.

The Court stated there was no doubt that both the director and his company owed a duty of care with respect to the installation of the staircase to others who might be on the construction site. When considering the question of when personal liability will attach to directors for corporate torts, the court recognized that the law was not clear and reviewed a number of relevant factors including:

Whether the negligent act was committed while
engaged in the business of the corporation;

Whether the representative was pursuing any
personal interest beyond the corporate interest;

Whether the representative owed a separate and
distinct duty of care towards the injured party;

That the conduct was in the best interests of
the corporation;

Whether the plaintiff voluntarily dealt with the
limited liability corporation, or had the corporate relationship imposed on it;

The expectation of the parties;

Whether the tort was independent;

The exception in Said v Butt, regarding claims of inducing breach of contract;

The nature of the tort, particularly whether it
was an intentional tort; and

Whether the damage was physical or economic.

While noting the challenges of deciding these matters on a case-by-case basis, the Court noted that a comprehensive and integrated test “remains elusive”. Ultimately, the Court found that in this case, the deciding factor was the nature of the damage as personal injury. Although the director’s tort was not independent of the corporation, the corporation was not designed to be a method of providing immunity to corporate actors for this sort of loss. There were strong public policy reasons to ensure that physically injured plaintiffs were compensated. Thus the Court found that the director could not escape personal liability for any personal injuries he caused to the plaintiffs as a result of a negligent act, even though his involvement in constructing the staircase was part of the business of his corporation.

The Court allowed the appeal and set aside the summary dismissal of the action. However, the decision did not resolve the action, as the Court did not determine the ultimate question of liability. The Court noted that there remained a dispute as to whether the staircase was negligently installed, whether that negligence caused it to fail, and whether the plaintiffs’ injuries resulted from that negligence. Nevertheless, the Court did clearly determine that a director without personal WCB coverage will be exposed to personal liability for workplace incidents in spite of the existence of a corporate entity. As the applicable tests for determining personal liability remain unclear, this will continue to be a difficult issue for directors to navigate.

In
the thousands of OHSA prosecutions that have occurred in Ontario history, defendants
have been jailed fewer than two dozen times.
However, in its recent decision of
Ontario
(Labour) v. New Mex Canada Inc., the Ontario Court of Appeal provided clarity on the sentencing
principles in OHSA cases. The court made
clear that just because jail terms are rare does not mean they should not be
imposed.

In
2013, a worker fell approximately 12 feet to his
death from an order picker with an open-sided non-slip-resistant platform. The
employer knew that the worker was epileptic and that he had fainted twice
before at work. The worker had received
no health and safety training, the order picker was not equipped with fall
protection equipment, and the worker was wearing dress shoes. The pathologist inferred that the worker had
a seizure on the forklift and fell while unconscious. The sentencing judge described the
circumstances as showing “the highest level of negligence”.

The Ministry of
Labour laid multiple OHSA charges against New Mex as employer, and New Mex’s two directors, Mr. Purba and Mr.
Saini. Each of the three defendants
pleaded guilty to two offences. On sentencing, the prosecutor had asked
for a total fine for New Mex of $100,000 or higher. Despite that, the sentencing
judge imposed a total fine on New Mex of $250,000 ($125,000 per count). For Mr. Purba and Mr. Saini, the sentencing judge concluded
that, as the sole directors of New Mex, they would
be paying the New Mex fine themselves, so to impose a fine upon them personally
would only cause more financial hardship. Instead, she imposed 25-day
intermittent sentences of jail time and 12 months of probation on both Mr.
Purba and Mr. Saini.

On the first-level appeal by the defendants, an appeal judge sitting
in the Superior Court of Justice allowed the appeal and held that the sentences imposed departed
substantially from appropriate sentences, making the sentences imposed
“demonstrably unfit”. The appeal judge varied the appealed sentences and imposed the following fines:
$50,000 on New Mex ($25,000 per count), and $15,000 on each of Mr.
Purba and Mr. Saini ($7,500 per count). No jail time was imposed.

The Crown (Ministry of Labour) appealed
to the Ontario Court of Appeal. While
the Court of Appeal found errors in principle made by the first-level appeal
judge that affected his conclusions, it found that the appeal judge was correct
in finding that the fines imposed by the sentencing judge were demonstrably
unfit.

In its decision, the
Court of Appeal discussed the principles of sentencing for regulatory offences
at length, and recognized the primacy of fines over incarceration in sentencing –
that is, in most cases, fines will be more appropriate than jail time. However,
the Court of Appeal clarified that just because incarceration is uncommon, does
not mean that it is not appropriate to achieve the goals of sentencing. Courts should not be treating the fact that
incarceration is rarely imposed for regulatory offences as a principle of
sentencing. In the circumstances of this
case, the Court of Appeal’s view was
that the jail terms were “entirely fit” and “much to be preferred to the
modest fines imposed by the appeal judge”.
However, based on fresh evidence put before the Court of Appeal on consent
detailing the directors’ current difficult life circumstances, the fact that it
had been close to six years since the incident and the fall-out from the
incident had been financially difficult for both of the directors, the Court of
Appeal did not reinstate the jail time.

In terms of fines, the Court held that a fine imposed on a corporation should not be treated as a fine imposed on a director, because a director is under no legal obligation to pay the corporate fine. The Court held that the fitness of an OHSA fine can be determined by asking: “What amount of fine is required to achieve general and specific deterrence, and would otherwise be appropriate bearing in mind the principles of sentencing, including proportionality, and parity?” The Court stated, “The answer to that question does not remotely support a $250,000 fine”, given that the company was small and financially weak, and considering the range of fines imposed on similarly situated offenders in similar cases. Ultimately, the Court of Appeal held that although the fines imposed by the appeal judge against all three defendants were lenient, they constituted sufficient deterrence and were not demonstrably unfit. The Court of Appeal noted in its decision that jail time has historically been reserved to cases where the defendant is a repeat offender, did not plead guilty, and showed no remorse. In light of the court’s confirmation that the rarity of jail time is not a sentencing principle, and that jail time would have been appropriate in this case, we will be keeping a keen eye on how this decision is applied by courts in future.

Effective January 1, 2019, employers in Alberta can no longer require workers to wear footwear that may pose a health or safety risk to workers. This change was made by way of an amendment to Alberta’s Occupational Health and Safety Code. While the legislation does not specifically mention high heels, the amendment effectively means the end of mandatory high heel policies sometimes seen in the hospitality industry and follows similar legislative changes in other provinces such as Ontario, British Columbia and Manitoba. The amendment can be found here (page 956).

The WSIB must prove that a worker intended to obtain WSIB benefits to which he or she was not entitled, when it charges a worker with “wilfully failing to inform the Board of a material change”, the Ontario Court of Appeal has decided.

The WSIB prosecuted three workers, who were receiving WSIB benefits, for failing to report a “material change” with respect to their entitlement to WSIB benefits. The WSIB argued that it was not required to prove that the workers intended to defraud the WSIB. The appeal court disagreed. It held that in order to obtain a conviction for failing to report a material change, the prosecutor must prove something akin to tax evasion or fraud. The court said that the WSIB must prove the following:

1. The accused knew that a material change in his or her health, income, employment status or other circumstance had occurred. Material change means a change that could affect his or her entitlement to benefits paid by the WSIB;

2. The accused intended not to inform the WSIB of that change; and

3.The accused:

a. intended by the failure to inform, to receive benefits to which he or she was not entitled, or

b. foresaw that the failure to inform was substantially certain to result in the receipt of benefits to which he or she was not entitled.

With respect to one of the three workers, whose first language was not English and who may not have understood his obligations, the appeal court held that the prosecutor had not proven the necessary intent. As such, his charge was dismissed.

The other two workers, who were found guilty at trial, were awarded a new trial as the trial justice’s decision did not contain sufficient detail to permit the court to determine whether the workers had the necessary intent to receive WSIB benefits to which they were not entitled.

The decision is somewhat of a setback for the WSIB in prosecuting workers for “WSIB fraud”, as it will often be difficult for the WSIB to prove that a worker intended not to inform the WSIB of a material change and intended to receive benefits to which he or she was not entitled.

Following policy consultations that took place from August 14, 2017 to January 15, 2018, the Workplace Safety and Insurance Board (WSIB or the Board) announced its new rate framework for employers. This framework will replace current WSIB policies on classification structure, rate setting, and retroactive experience rating on January 1, 2020. As such, employers should take note that there may be a change to how their business is classified and how premium rates are set as of January 1, 2020.

The new framework introduces six (6) core policies to replace the current thirteen (13) that make up the present system. Notably, the new Employer Level Premium Rate Setting policy replaces current policies on the Merit Adjustment Premium Program, the Construction Industry Plan, and the New Experimental Experience Rating Plan (NEER). In preparing for the new system, employers should note that the severity of workplace accidents (as affected by the length of time that injured employees spend away from work) will become increasingly important for setting premium rates.

According to the Board, the new framework will be simpler and much easier for employers to understand. Additionally, the Board states that the new framework promises predictability and a more accurate reflection of the level of risk that individual employers and industries bring to the system. Under the new model, the WSIB limits an employer’s potential rate increase to a maximum of three risk bands per year. Employers will also be able to access their projected premium rates for future years. Additionally, the rate setting window used to set premium rates has been extended from three (3) or four (4) years to six (6) years. This change will reduce the impact that a single year has on an employer’s premium rate.

Every business registered with the WSIB should receive a letter about premium rates under the new framework later this year. More information on the upcoming rate framework changes can be found here.

Last year, we discussed on this blog, the case of an excavation contractor who was facing criminal negligence causing death and manslaughter charges in relation with the accidental death of one of his employees. Since then, that contractor has been found guilty on both charges[1], and on September 18, 2018, he was sentenced to 18 months in prison[2].

It is worth briefly reviewing the underlying facts of this case. On April 3, 2012, the contractor and an employee were replacing a sewer line when the walls of the trench collapsed killing the employee instantly. The evidence adduced at the preliminary inquiry tended to demonstrate that such accident took place because the contractor let his employee perform the work without taking the mandatory security measures required by the applicable health and safety regulations and, as a result, the contractor was personally charged with criminal negligence causing death and manslaughter.

The trial took place from November 27 to December 15, 2017. According to the contractor’s defense, the trench walls collapsed a first time while the employee was installing the shoring systems in the trench, burying the employee’s legs. A few minutes later, while the contractor was trying to free the employee, a second wall collapsed, burying the contractor up to the knees and fully submerging the employee’s body.

The court rejected this version of the events and rather accepted the Crown’s theory that the trench walls only collapsed once, while both the contractor and his employee were in the trench without any shoring systems being installed. Both the firefighters and the investigators from the Commission des normes, de l’équité, de la santé et de la sécurité du travail (the “CNESST” – Quebec’s workplace health and safety board) who were on scene shortly after the accident, stated that the workplace presented an enormous hazard for the trench walls to collapse. More specifically, the investigators of the CNESST, as well as the Crown’s experts, noted that there were numerous violations of health and safety regulations and dangerous conditions on the work site.

The judge found that the Crown had proven, beyond a reasonable doubt, all the essential elements of the offence of manslaughter:

The contractor’s conduct constituted an illegal act. As the employee’s employer, the contractor had the obligation to ensure that the trench walls were secured in accordance with the requirements of section 3.15.3 of the Safety Code for the Construction Industry before sending him into the trench, which he failed to do.

The contractor’s conduct caused the death of a human being. The employee’s death was the result of the contractor’s failure to comply with the requirements of the Safety Code for the Construction Industry.

The illegal act was objectively dangerous. The Superior Court already answered this question in the affirmative when it confirmed the contractor’s committal to trial for the charge of manslaughter.

The contractor’s conduct significantly departed from the conduct of a reasonable person placed in the same circumstances (criteria applicable when the illegal act is a strict liability offence). The Court also answered this question in the affirmative, underlining the fact that even the firefighters refused to go in the trench without a proper shoring system being installed and that both the inspectors and the Crown’s experts agreed that the workplace was extremely hazardous.

A reasonable person would have foreseen the risk of bodily harm. According to the court, it was very foreseeable given all the circumstances of the case.

The judge also found that the Crown had proven, beyond a reasonable doubt, all the essential elements of the offence of criminal negligence causing death:

The contractor had the legal obligation to do or not to do something. Pursuant to section 217.1 of the Criminal Code, the contractor was under a legal duty to take all reasonable steps to prevent bodily harm to the employee whose work he had the authority to direct.

This act or omission caused the death of a human being. As previously established, the court determined that the employee’s death was caused by the contractor’s conduct.

The contractor’s conduct displayed a wanton or reckless disregard for the lives or safety of other persons. The Court noted that the contractor’s conduct displayed a total lack of consideration for its foreseeable consequences concerning the employee’s safety.

The contractor’s conduct significantly departed from the conduct of a reasonable person placed in the same circumstances. As previously established, the Court determined that the question should be answered in the affirmative.

However, it should be noted that because of the rule against multiple convictions for the same offence, a conditional stay of proceedings was ordered with respect to this charge of criminal negligence causing death.

The parties were back in Court this September for sentencing. The Crown requested a 3-year jail sentence while the defense argued for a sentence of 90 days to be served intermittently along with a 3-year probation, including 240 hours of community services, and a $5,000.00 fine.

The court stated that the sentence shall not exceed what is just and appropriate, given the moral blameworthiness of the offender and the gravity of the offence. In addition, it is possible and appropriate to consider the objectives of denunciation and general deterrence. The Court considered that the mere possibility of imprisonment would act as a much larger deterrent than the overall length of the sentence.

With these considerations in mind, and considering the aggravating factors (including that the contractor had previous convictions for health and safety violations) and mitigating factors of the file, the Court found it was appropriate to impose an 18-month jail sentence on the contractor.

One thing is certain, by imposing prison time on this contractor, which is a first in Quebec legal history, the Court of Quebec certainly wanted to send a clear message to all employers concerning the importance of complying with their occupational health and safety obligations. Employers, and supervisors, are at risk of both provincial health and safety charges and criminal negligence and manslaughter charges. We invite you to consult with our team of legal experts for any question you might have concerning your health and safety obligations.

An Assistant Fire Chief has won his wrongful dismissal suit after he was fired following a 90-day administrative driving prohibition for impaired driving while off-duty.

The Assistant Fire Chief was on the way home from a “date night” with his spouse when he was pulled over for suspected impaired driving. He failed two roadside breathalyzer tests and received the administrative driving suspension. He immediately advised the Fire Department and was distraught and remorseful.

Although the Fire Chief and human resources advisor advised against firing, and a number of firefighters signed a letter asking that the Assistant Fire Chief not be fired, the fire department’s Chief Administrative Officer was adamant and went ahead and dismissed him.

The court held that the fire department did not have just cause for dismissal. The Assistant Fire Chief was off-duty and he was not representing the fire department at the time. While the truck he was driving belonged to the fire department, it was not marked as such. There was no public knowledge of his administrative driving prohibition. His conduct was not of the same “moral reprehensibility” as in other cases where employees’ off-duty conduct was just cause for dismissal. The Assistant Fire Chief was not the public face of the fire department. The other career firefighters in the fire department had not lost confidence in him. There was no criminal charge, but rather he received a 90-day driving suspension. In conclusion, the court decided that his off-duty conduct was not incompatible with the faithful discharge of his duties or otherwise prejudicial to the interests or reputation of the fire department.

In the end, the court awarded the employee five months’ salary as provided for in his employment contract.

The Alberta Court of Appeal recently provided clarity on what the Crown must prove in a prosecution under the general duty section in the Occupational Health and Safety Act (Alberta) (“OHSA”) of failing to ensure the health and safety of a worker. The general duty section was then section 2(1) of the OHSA, and is now section 3(1)(a).

The employer had been originally found guilty on two charges, including the general duty offence, following a workplace fatality. The employer successfully appealed the convictions and the summary conviction appeal judge ordered a new trial. The Crown was granted leave to appeal the decision, bringing the question before the Alberta Court of Appeal. Please see our previous posts discussing this case for more information on the background and history of the proceedings.

The key question before the Alberta Court of Appeal was whether the expression “as far as is reasonably practicable for the employer to do so” in the general duty section was part of the actus reus; in other words, whether it was part of the physical components of the offence that the Crown had to prove. The majority set out to provide an interpretation of the general duty section that would result in a more comprehensive framework for the actus reus requirement for the general offence provision.

The Crown argued that it could rely on the “accident as prima facie proof of breach” concept when proving the actus reus in order to satisfy its legal burden. In the majority decision, the court disagreed and determined that the expression “as far as it is reasonably practicable for the employer to do so” did form one element of the actus reus. Therefore, for an offence under the general duty of the OHSA, the Crown must establish beyond a reasonable doubt the following:

The worker must have been engaged in the work of the employer;

The worker’s health or safety must have been threatened or compromised (i.e. an unsafe condition); and

It was reasonably practicable for the employer to address the unsafe condition through efforts that the employer failed to undertake.

The majority found that these elements were consistent with the language of the OHSA, its purpose and intent, the Supreme Court of Canada’s guidance in Sault Ste. Marie and the interpretation given to similar provisions in other jurisdictions. This did not constitute a codification of the due diligence defence and did not undermine the OHSA’s basic goals. The majority did acknowledge that the employer’s obligation to establish due diligence on the balance of probabilities would overlap with the Crown’s obligation to prove that it was reasonably practicable for the employer to address the unsafe condition. However, those remained distinct inquiries which were subject to different standards of proof. In addition, certain factors such as mistake and employee error could affect the due diligence defence in ways that would not affect the actus reus assessment.

The second ground of appeal was whether the appeal judge erred in law in her interpretation and application of the due diligence defence. The majority reviewed this issue and determined that the Crown had not identified any error in the appeal judge’s review of the application of the due diligence defence and thus this ground of appeal was dismissed.

In the minority decision (concurring in the result), the justice disagreed that the words “as far as it is reasonably practicable for the employer to do so” constituted part of the physical components that the Crown must prove. The minority decision stated that imposing that requirement on the Crown would require it to prove standard industry practices, what a reasonable company would have done, or that the measures taken by the employer were insufficient and unreasonable. Thus the Crown would have to prove negligence or negate due diligence. However, it would not always be possible for the Crown to prove exactly how a workplace incident actually occurred, which is why the general duty was set out in the OHSA. Therefore, to establish the physical components for the general duty offence, the minority held that the Crown need only prove beyond a reasonable doubt that something happened within the control of an employer that negatively affected the health or safety of its workers.

The minority agreed in the result that the appeal should be dismissed and the matter sent back for a new trial.

Over the objections of a company’s employment lawyer, an Ontario court has permitted an employee to refer, in her Statement of Claim for constructive dismissal and bad faith, to the “communications and conduct” of the company’s lawyer in respect of a sexual harassment investigation.

The employee made sexual harassment and bullying allegations against a coworker. The employer investigated and concluded, without speaking with the employee, that the allegations were not substantiated. During this period, the employee was placed on a Performance Improvement Plan.

The employee eventually retained counsel who requested a severance package. The employer then also retained counsel. For a few months, the lawyers communicated by phone and correspondence. They discussed the investigation. The employee’s counsel urged the company to conduct a new or more thorough investigation, which the employer did. The employee then started her constructive dismissal lawsuit and included, in some paragraphs of her Statement of Claim, reference to some of counsel’s discussions and conduct.

The company moved to strike those paragraphs from the Statement of Claim on the basis that the discussions between counsel were “without prejudice” settlement discussions. The Master refused to strike the paragraphs. She held that the discussions and conduct of the company’s lawyer with respect to the harassment investigation did not relate to a “litigious dispute” but rather to the company’s statutory obligation under the Occupational Health and Safety Act to investigate the sexual harassment allegations. The sexual harassment investigation report itself was not privileged. Counsel’s conduct during the sexual harassment investigation was “highly relevant and both counsel must have understood its relevance should litigation ensue”. Finally, although the outcome of negotiations between counsel may have led to a severance settlement, and the employer’s lawyer told the employee’s lawyer that she wished to engage in without prejudice settlement discussions prior to sharing any information with him, the communications in relation to the investigation and the PIP were directly relevant to the employee’s claim for constructive dismissal and bad faith.

In the result, the communications between counsel regarding the sexual harassment investigation and the PIP were not “settlement privileged” and were not struck from the employee’s Statement of Claim.

In what appears to be a novel decision in the regulatory context, a judge has held an owner of an electrical contracting firm personally liable for the company’s regulatory fines after he transferred assets out of the company following a fatal incident.

In 2014, an elderly man died from burns after being found lying on his bathroom floor, which had overheated. It turned out that the overheating was caused by the negligence of one of the contractor’s employees four years earlier when he installed an underfloor heating mat in the bathroom.

The company pleaded guilty to three charges under the Electricity Act in respect of the installation. The court fined the company $430,000.

The judge found that the owner had transferred assets, including property, out of the company after he learned that the company was going to be charged, in order to avoid having to pay a fine. The judge also stated that the owner had been dishonest in his testimony, and misleading to the Electrical Safety Authority. The company was evidently left with no, or very few, assets to pay the fine.

The judge decided to “pierce the corporate veil” and require the owner and a related entity, to which he had transferred assets, to pay the fine. In a rather scathing decision, the judge held that the owner, by blurring the lines between himself and the company, had put his own personal assets at risk. The judge decided that although no statute gave him the power to “pierce the corporate veil” and make the owner personally liable, a judge should do so where it would be “too flagrantly opposed to justice” not to. The judge stated:

If Mr. Merante had simply shuttered Pro-Teck and left its assets intact and gone on and opened up Master Electric, he could not have been faulted . . . But he did not simply do that. Two roads diverged before him and Mr. Merante took the one marked self-interest and deceit rather than the one that was marked by his duty to respect his obligations as a shareholder and his duty to accept that the protections that came with Pro-Teck’s corporate status also created responsibilities.

In the result, the judge decided that the owner’s “acts deprive him and Master Electric, both beneficiaries in one way or another of the diversion of assets, of their legal separateness from Pro-Teck. He in effect treated all three legal entities as one; as he sowed, so shall he reap. The fines levied against Pro-Teck may be recovered from Mr. Merante personally and from Master Electrical Contracting Services Ltd., 2433302 Ontario Ltd.”

It is unknown at this time whether this decision has been appealed. Although the owner’s behaviour was clearly troubling to the judge in this case, it is an open question as to whether an appeal court would decide that the judge had the legal authority to “pierce the corporate veil” and make the owner personally liable for the fine.

A group of female police officers has lost its bid to bring a class action in the courts for gender discrimination and harassment.

The officers claimed systemic gender-based discrimination and harassment by male members of the police force.

The court decided that it had no jurisdiction over the class action because the claims should have been brought at arbitration. Under the Police Services Act, arbitration was mandatory – and binding – even though the arbitrator did not have the power to award punitive damages. The officers therefore were barred from making the discrimination and harassment claim in the courts.

The fact that the police association (the police union that would have carriage of a harassment case at arbitration) was made up mostly of male members did not require the court to take jurisdiction.

The court also decided that a claim of workplace discrimination did not make out a viable “cause of action” at common law. This meant that even if the court (not an arbitrator) had jurisdiction over the case, the claim was not the type of case that courts will hear.

The judge concluded:

The Defendants should not regard this result as a vindication of current practices. Like Sharpe J.A. in A.(K.), I have considerable sympathy for the Plaintiffs’ desire to have this litigated in court. Even on the limited and contradictory evidence before me, it is apparent that this case raises serious, triable issues relating to the workplace culture. The allegations are very troubling and will require close scrutiny should this matter proceed to another forum for adjudication.

The court action was therefore stayed, bringing it to an end.

The plaintiffs have appealed this decision to the Court of Appeal for Ontario.

An Alberta safety manager has won $28,000 in damages after he was fired by his employer. The employer argued that the employee quit or, in the alternative, that the employer had just cause for dismissal.

The court rejected the employer’s argument that the employee had quit. The employer’s email stating, “Don’t bother coming in either I’ll look after all this k that your two weeks. Thanks for your services have good day” [sic], made it clear that the employer had dismissed the employee.

The court also rejected the employer’s argument that it had just cause for dismissal. Contrary to the employer’s assertion, the employee had not failed to complete an assigned task (addition of certain safety procedures to the employer’s safety manual) and even if he had failed to do so, there was no evidence that the company had suffered harm as a result.

Further, the employee’s outburst in which he told his manager to “f— off” on a telephone call was not just cause for dismissal. It was said on a private call and there was no “scene” in front of other employees or the public. The employee had an unblemished work record. The manager admitted that he fired the employee in the heat of the moment.

The court therefore decided that the employee, who had 3.5 years of service and an annual salary of $82,000.00, was entitled to 4 months of pay in lieu of notice. He was therefore entitled to approximately $28,000 in damages.

A recent Ontario court decision illustrates the serious business implications that Occupational Health and Safety Act compliance issues or disputes can have on a company.

The City of Sudbury banned a paving company, Interpaving, from bidding on City contracts for four years. The City gave three reasons for the ban. According to the City: (1) Interpaving had sued the City in relation to five City projects or contracts; (2) Interpaving violated health and safety legislation, and (3) Interpaving had “a significant history of abusive behaviour and threatening conduct” toward City employees.

With respect to safety issues, the City noted an incident in 2015 in which a pedestrian was struck and killed by a construction vehicle as she entered a construction zone in which Interpaving was working. The Ministry of Labour issued compliance orders against Interpaving and the City. Interpaving took the position, in appeals of those orders, that the City and not Interpaving was the constructor under the OHSA. The City claimed that Interpaving failed to understand its obligations under the OHSA including its role as constructor and failed to cooperate with the City on safety matters.

Interpaving asked the court to overturn the bid ban. It argued that the City had not followed a fair process in coming to the decision to impose the bid ban. The majority of the court disagreed. The majority decided that although the City had initially breached its obligation of procedural fairness (by not giving Interpaving notice of its intention to debar, the City’s grounds for debarring, a description of the potential penalties and an opportunity to respond), the City had “cured” that breach through its “reconsideration and process which gave Interpaving full opportunity to be heard.

The Court stated:

In the Debarment Letter, the City made reference to “numerous orders in relation to projects that Interpaving has been involved in for the City…including seven orders in relation to the City’s Elgin Street Project issued by the Ministry of Labour”. The reference to OHSA orders was also made under the heading “Poor Contract Performance”. Contrary to the assertion made by Interpaving, there is nothing unreasonable in the consideration of OHSA orders in connection with the quality oflnterpaving’s contract performance. [emphasis added]

Interpaving stated that it employed 200 people in the city and an additional 200 in the summer. This type of “debarment” decision by public entities can have a serious impact on businesses. The Court decision indicates that Interpaving’s road paving business is primarily in the City of Greater Sudbury.

An Ontario appeal judge has upheld the dismissal of Occupational Health and Safety Act charges against employees due to delay.

The charges resulted from the death of a mining employee from cyanide intoxication by way of skin absorption. The company itself had pleaded guilty to criminal negligence charges, after which all fifteen OHSA charges against the company were withdrawn. Criminal charges against one of the employees were withdrawn at the same time.

The total delay in this case, from the laying of the charges until the last day scheduled for trial, was 21 months, which exceeded the 18-month presumptive delay ceiling set out by the Supreme Court of Canada in the Jordan case.

The trial judge found that the Ministry of Labour prosecutor had breached his duty to develop and follow a concrete plan to minimize the delay due to the complexity of the case. Also, it was not reasonable for the prosecutor to fail to seek trial dates until 5 1/2 months before the 18-month “presumptive ceiling” for delay. Further there was no effort by the prosecutor until late in the case, to seek to narrow the issues or shorten the trial by seeking admissions, attempting to negotiate an agreed statement of facts, or seeking agreement regarding documents, despite being invited by the defence to do so. The trial judge therefore concluded that the prosecutor’s trial management fell well below the standard set out in the Jordan, and the appeal judge upheld that finding.

In the result, the appeal judge upheld the trial judge’s decision to stay the charges against the employees for delay, bringing the prosecution to an end – despite the fact that the charges were particularly serious as they resulted from a fatality.

Two forklift operators at a bottling plant have been found guilty after they were served with tickets under the Occupational Health and Safety Act charge for using cell phones while sitting on their forklifts. The charge was operating equipment in a manner that may endanger a worker: one could say “distracted driving”, but on a forklift.

A coworker staged a work refusal after observing the forklift operators using cell phones while seated on their forklifts. A Ministry of Labour inspector was called in. The coworker, who was retired at the time of trial, testified that one operator was seen sitting on the forklift looking at the cell phone while the forklift was stationary and not moving, and the other operator was seen showing his cell phone to another employee.

The court did not accept the forklift operators’ version of events: one said that he had used his cell phone only to check the time, and the other said that he was off of his forklift and that it was actually another employee who had been using his cellphone. The court found that they had their cell phones with them and were using them.

The court decided that “operating or using” a forklift included sitting on a forklift even when it was stopped and turned off; other workers and forklifts may be nearby and put at risk by the operator’s distraction and inattention to his surroundings while using the cell phone. Further, the employer had a clear rule prohibiting use of cell phones in the warehouse, and even displayed a poster with a cell phone with a slash through it. The operators were therefore guilty of the OHSA charge against them.

The court stated:

“Like motorists who unlawfully hold or use cellphones or other mobile communication devices while operating or driving motor vehicles on public highways in Ontario, workers that use cellphones or other mobile communication devices while operating equipment or machines in factories or warehouses, such as a forklift, would also pose the same danger to themselves or others, as a consequence of being distracted to what is going on around them while using those mobile communication devices.”

The Alberta Court of Appeal recently reviewed the provisions of the Workers’ Compensation Act (the “Act”) that enable the Workers Compensation Board (“WCB”) to be subrogated to a right of a claim against a party not covered by the Act when the WCB has paid out benefits to a party who is covered by the Act.

In the case in question, the defendant was the owner of a vehicle and had taken his vehicle in to a repair shop to have its brakes repaired. A mechanic employee of the repair shop took the defendant’s vehicle for a test drive with the shop’s authority and the defendant’s consent. During the test drive, the vehicle collided with the plaintiff’s vehicle and the plaintiff sustained injuries. There was no dispute that the mechanic’s negligence caused the accident. The plaintiff was also operating his vehicle in the course and scope of his employment at the time of the accident, and thus he claimed benefits from the WCB. Both the mechanic driver and the repair shop were immune from any lawsuit arising from the accident by operation of the Act. There was no question that but for the Act, the repair shop, as the mechanic’s employer, was vicariously liable for the plaintiff’s loss at common law.

The WCB accepted the plaintiff’s claim for WCB benefits and thus the Act vested the plaintiff’s action in the WCB. The WCB commenced an action in the plaintiff’s name, seeking to recover from the defendant owner the benefits it had paid to the plaintiff. As noted, an action against the repair shop and the mechanic was barred by operation of the Act. The defendant was the only involved party who was not protected by the Act. The plaintiff’s action against the owner was based on the provisions of the Traffic Safety Act that imposed vicarious liability on the owner of a vehicle. It was undisputed that the owner was vicariously liable for the plaintiff’s loss under the Traffic Safety Act.

In these circumstances, the Act limits liability to a non-WCB covered defendant to only “that portion of the damage or loss occasioned by the defendant’s own fault or negligence.” The trial judge held that she could only find the defendant liable for the portion of the plaintiff’s loss occasion by the defendant’s fault, not for any loss that was contributed to by the repair shop’s fault. The trial judge then found that the repair shop had the power to supervise the driver while the vehicle owner did not, and thus apportioned 100% of the plaintiff’s loss to the repair shop. The effect of this decision was that the plaintiff/WCB had no ability to recover from any of the parties because the only parties who were liable were immune from suit.

The plaintiff appealed. The Court of Appeal confirmed that pursuant to the Act, defendants who are not protected from suit should not be held liable for the portion of loss caused by an employer or worker who is protected from suit. The repair shop’s notional vicarious liability constituted fault under the Act and thus the court had to apportion the plaintiff’s loss between the repair shop and the owner. The Court of Appeal confirmed that the effect of the Act is that liability of the owner is several, not joint nor joint and several. The court affirmed the trial judge’s finding that the repair shop was 100% notionally liable for the plaintiff’s loss, confirming that this was consistent with both the purpose of the Act and the Traffic Safety Act.

Therefore, in the end, in what was essentially a contest between the WCB and the automobile insurer, the insurer came out ahead.

As we previously reported, the majority of the amendments to Alberta’s Occupational Health and Safety Act set out in Bill 30 will be coming into force on June 1, 2018. Earlier this month, additional amendments were released to Alberta’s Occupational Health and Safety Regulation and Occupational Health and Safety Code 2009. These amendments will also be in force June 1, 2018.

The changes introduced by these most recent amendments include:

additional requirements for joint work site health and safety committees (JWSHSC) including:

details on what is required in their terms of reference;

additional duties for the JWSHSC and for employers, contractors and prime contractors working with the JWSHSC;

requiring that employers/prime contractors must use an organization designated by the Minister to provide the required training to JWSHSC co-chairs and health and safety representatives (as of the date of this post, the list of approved providers had not yet been released);

additional requirements for employers relating to violence and harassment, including:

developing and implementing, in consultation with the JWSHSC/health and safety representative/affected workers, a violence prevention plan that includes a violence prevention policy and violence prevention procedures, and listing some minimum requirements for the violence prevention policy and procedures;

taking reasonable precautions where an employer is aware that a worker is or is likely to be exposed to domestic violence at a work site;

developing and implementing, in consultation with the JWSHSC/health and safety representative/affected workers, a harassment prevention plan that includes a harassment prevention policy and harassment prevention procedures, and listing some minimum requirements for the harassment prevention policy and procedures;

conducting a review of these plans every 3 years, when an incident occurs, or when the JWSHSC/health and safety representative recommends a review;

ensuring that workers are properly trained in relation to violence and harassment;

ensuring that workers who report an injury or adverse symptom resulting from an incident of harassment or violence are advised to consult a health professional of the worker’s choice and requiring that employees be paid while attending treatment sessions that occur during regular work hours;

additional provisions relating to workplace violence for employers in the retail fuel and convenience sectors; and

The Ontario Labour Relations Board has suspended a Ministry of Labour inspector’s compliance order relating to an employer’s harassment investigation after the employer appealed the orders and the complainant resigned.

The MOL inspector’s compliance order read as follows:

The employer shall ensure that an investigation is conducted into incidents and complaints of workplace harassment that is appropriate in the circumstances to protect a worker from workplace harassment. At the time of this visit, additional information regarding an allegation of workplace harassment was reported to the employer by this Inspector and an investigation appropriate in the circumstances had not been conducted by the employer.

The OLRB noted that the person who filed the harassment complaint and reported it to the MOL had since resigned. Also, the employer said that it had investigated the complaint and reported the result to the parties.

The OLRB stated that there was nothing in the application (the appeal document) suggesting that there would be ongoing safety issues posed to any workers, including the worker who complained, if the compliance orders were not suspended.

Because the MOL had not opposed the employer’s request for suspension of the compliance order, the “low threshold for establishing a prima facie case” had been met. There did not appear to be any reason to defer to the MOL inspector. The compliance order was therefore suspended pending the result of the appeal.

An employer that terminated an employee alleging just cause was ordered to pay damages for wrongful dismissal, including an award of aggravated damages of $75,000.

The plaintiff employee worked at the defendant’s waste treatment plant for almost 4 years. The circumstances leading to his dismissal began with an innocuous, routine safety meeting. The plaintiff had advised his supervisor that he was going to be doing preventative maintenance that day. He then proceeded to obtain a work permit, which was standard practice. Later that day, the plaintiff spoke to the safety supervisor who asked about a contract worker and whether he had a permit. The plaintiff replied that he did not know. Later that afternoon, the plaintiff was called into a meeting with the manager where he was “chewed out” and accused of putting a life in danger. This allegation related to the contract worker who was apparently working without a permit. The plaintiff was surprised and tried to respond, to clarify that it was his supervisor’s responsibility, not his, to assign work to the contract worker. The plaintiff was suspended and summarily escorted off the property.

Following his suspension, the plaintiff continued, unsuccessfully, trying to communicate his side of the story to the employer. He ultimately went on stress leave. Over 1 month after his initial suspension, the plaintiff received a letter from the employer advising that he had been terminated for cause. When the trial started approximately 5 years later, the employer withdrew the just cause argument.

The plaintiff was successful in his wrongful dismissal claim against the employer and was awarded 6 months’ pay in lieu of notice. The court considered the plaintiff’s claim for aggravated damages resulting from how he was treated before and during the termination. Among the reasons considered in support of the claim for aggravated damages was the employer’s investigation. The court held that the employer’s investigation clearly failed to give any serious consideration to the plaintiff’s side of the story, and that the plaintiff had not been given the proper opportunity to present his version of events. The evidence suggested that the employer had made up its mind to dismiss the plaintiff within days of his suspension, supporting the conclusion that the investigation was either incompetent and unfair or even a sham. The employer had also ignored or failed to give proper weight to information received from another employee who was present at the initial safety meeting and supported the plaintiff’s account of what happened.

Ultimately, the court was satisfied that the employer’s actions amounted to a breach of the obligation of good faith and fair dealing and supported an award of aggravated damages. The employer’s false reasons for dismissal and inadequate and unfair investigation resulted in the plaintiff failing to receive procedural fairness. The court determined that the appropriate amount for aggravated damages was $75,000.

A police union’s harassment grievance arbitration hearing should be open to the public, including the press, despite the sensitive issues that it raised, a labour arbitrator has ruled. The case illustrates the publicity risk that employers face in many workplace disputes, and the need for employers to consider publicity when analyzing litigation risk.

The grievance alleged that the police services board failed to provide a harassment-free workplace to its civilian members. The issues had resulted in two workplace investigations that had not resolved the dispute.

The arbitrator noted the general requirement, under the Statutory Powers Procedure Act, that a hearing be open to the public. The police board argued that the press should be excluded. Two officials with the police force, who were “interested parties” at the arbitration, argued that the hearing should be held in camera – that is, closed to the public and the media.

The arbitrator disagreed. There were a number of factors in favour of having an open-to-the-public hearing. This was not a case about a single employee; it raised broader issues about the workplace. A number of members of the police service were already aware of the case. The police service was a public body, which was a strong factor in favour of having the hearing be open to the public including the press. The particular reporter who wished to attend the hearing had said that he would not audio-record it, and the risk that media reports would influence witnesses who had not yet testified was low. Although some of the evidence at the hearing might reflect poorly on some of the participants, the arbitrator noted that there may be publicity about this matter regardless of whether media is present.

In the result, the arbitrator ruled that the hearing be open to the public.

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